the world we have made as a result of the

University of Michigan Health Management Research Center

The world we have made as a result of the

level of thinking we have done thus far

creates problems we cannot solve

at the same level of thinking

at which we created them.

- Albert Einstein


Zero Trends: Health as a Serious Economic Strategy

THE UNIVERSITY OF MICHIGAN

HEALTH MANAGEMENT RESEARCH CENTER


UM-HMRC Corporate Consortium

FordDelphiKelloggUS SteelWe EnergiesJPMorgan Chase Delphi Automotive Southern CompanyNavistar Corporation University of MissouriMedical Mutual of OhioFlorida Power and LightSt Luke’s Health System Allegiance Health SystemCuyahoga Community College United Auto Workers-General Motors Wisconsin Education Association TrustAustralian Health Management Corporation

Steelcase (H)General Motors Progressive (H)

Crown EquipmentAffinity Health System

SW MI Healthcare Coalition (H)

*The consortium members provide health care insurance for over two million Americans. Data are available from three to 20 years.

Meet on First Wednesday of each December in Ann Arbor


Zero TrendsWellness at the Workplace

28th Annual Conference March 18, 2009

Mission: Change the Strategy for Health and Disability from a Health Strategy to a Business Strategy:

Natural Flow: High Risks and Costs in Americans 5

Business Case: Health as an Economic Strategy 5

Solutions: Five Pillars to Support a Culture of Health 30

Slides available


Mission

Change the Strategies for Health and Disability to

A Serious Business or Economic Strategy


Section I

The Current Healthcare Strategy

Wait for Sickness and then Treat

(…in Quality terms this strategy translates into “wait for defects

and then fix the defects” …)


Total Medical and Pharmacy Costs Paid by Quarter for Three Groups

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Q_12 Q_10 Q_8 Q_6 Q_4 Q_2 Q0 Q2 Q4 Q6 Q8 Q10 Q12

Serious Cost

Medium Cost

Low Cost

Musich,Schultz, Burton, Edington. DM&HO. 12(5):299-326,2004

The 20-80 rule is always true but terrifically flawed as a strategy


Low

$5,114$5,710

$7,991

$10,785$11,909 $11,965

$2,565$3,353

$4,620

$6,625$7,989

$8,927

$1,414 $2,944$3,800

$5,212

$6,636$8,110

$1,776 $2,193 $2,740$3,734 $4,613

$5,756

$0

$3,000

$6,000

$9,000

$12,000

19-34 35-44 45-54 55-64 65-74 75+

Costs Associated with RisksMedical Paid Amount x Age x Risk

Annual Medical Costs

Med Risk

Age Range

High

Non-Participant

Edington. AJHP. 15(5):341-349, 2001


Section II

Build the Business Case for the Health as a Serious Economic

Strategy

Engage the Total Population to get to the Total Value of Health

Complex Systems (Synergy and Emergence) versus Reductionism (Etiology)


Business Concept

Change in Costs

follow

“Don’t Get Worse”


Estimated Health Risks Health Risk Measure

Body WeightStress Safety Belt UsagePhysical ActivityBlood PressureLife SatisfactionSmoking Perception of Health Illness DaysExisting Medical ProblemCholesterolAlcoholZero Risk

High Risk

41.8%31.8% 28.6% 23.3% 22.8%22.4% 14.4% 13.7%10.9%9.2%8.3%2.9%

14.0%

OVERALL RISK LEVELSLow Risk 55.3%Medium Risk 27.7%High Risk 17.0%

From the UM-HMRC Medical Economics Report

Estimates based on the age-gender distribution of a specific corporate employee population


1640 (35.0%)

4,163 (39.0%)

678(14.4%)

Risk Transitions (Natural Flow)

Time 1 – Time 2High Risk(>4 risks)

Low Risk(0 - 2 risks)

Medium Risk(3 - 4 risks)

2,373 (50.6%)

21,750 (77.8%)

4,546(42.6%)

10,670 (24.6%)

4,691 (10.8%)

27,951 (64.5%)

11,495 (26.5%)

5,226 (12.1%)

26,591 (61.4%)

892(3.2%)

1,961 (18.4%)

5,309 (19.0%)

Modified from Edington, AJHP. 15(5):341-349, 2001

Average of three years between measures


Medical and Drug Cost (Paid)*

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

2001 2002 2003 2004

Year

Paid Non-Impr

Improved

*per employee , Improved=374, Non-Improv=103HRA in 2002 and 2004Improved=Same or lowered risks*Medical and Drug, not adjusted for inflation

Slopes differ

P=0.0132

Impr slope=$117/yr

Nimpr slope=$614/yr


Total Value of HealthMedical/HospitalDrugAbsenceDisability Worker’s CompEffective on JobRecruitmentRetentionMorale

DiseaseHealth

Risks

The Economics of Total Population Engagement and Total Value of

Health

Low or

No Risks

Where is the Investment?

increase

increase

decrease


Section III

The Evidence-Based Solution:

Integrate Health into the Culture

(…in Quality terms this strategy translates into “…fix the systems that lead to the

defects” …)


Health Benefit Plan Design

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Q_12 Q_10 Q_8 Q_6 Q_4 Q_2 Q0 Q2 Q4 Q6 Q8 Q10 Q12

Serious Costs

Medium Cost

Low Cost

TMS and Wellness Opportunities

Condition Management Opportunity

Sickness & Care Management Opportunity

Medical and Drug Costs only


Integrate Health into the CultureHealthier

PersonBetter

EmployeeGains for TheOrganization

1. Health Status 2. Life Expectancy3. Disease Care Costs4. Health Care Costs5. Productivity

a. Absenceb. Disabilityc. Worker’s Compensationd. Presenteeisme. Quality Multiplier

6. Recruitment/Retention7. Company Visibility8. Social Responsibility

1981, 1995, 2000, 2006 D.W. Edington

Lifestyle Change

Health Management Programs

Company CultureSenior Leadership Operations Leadership Self-Leadership Reward Positive Actions Quality Assurance


SeniorLeadership

Create the Vision

•Commitment to healthy culture

•Connect vision to business strategy

•Engage all leadership in vision

First Fundamental Pillar


Vision from the Senior Leadership

Clear Vision within Leadership

Vision Connected with Company Strategy

Vision Shared with Employees

Accountability and Responsibility Assigned to Operations Leadership

Management and Leadership of the Company and Unions transition to the Cheerleaders


Operations Leadership

Align Workplacewith the Vision

•Brand health management strategies

•Integrate policies into health culture

•Engage everyone

Second Fundamental Pillar


Environment InterventionsMission and Values Aligned with a Healthy and Productive Culture

Policies and Procedures Aligned with Healthy and Productive Culture

Vending Machines Job DesignCafeteria Flexible Working HoursStairwells Smoking Policies

Benefit Design Aligned with a Healthy and Productive Culture

Management and Employees prepared to integrate health into the company culture (small group meetings, shared vision, expectations,…)


SelfLeadership

Create Winners

•Help employees not get worse

•Help healthy people stay healthy

•Provide improvement maintenance resources

Third Fundamental Pillar


Health Risk Appraisal

Plus

Biometrics Screening and Counseling

Plus

Contact a Health Advocate

Plus

Two Other Activities

Individual Strategy for Engagement


Population-Based ResourcesWeight Management Business Specific ModulesPhysical Activity Career developmentStress Management CommunicationsSafety Belt Use Financial ManagementSmoking cessation Social/Information NetworksNutrition Education Disease Management Clinic or Medical CenterOn-Line Information ErgonomicsNurse LineNewsletters Vision

DentalBehavioral Health & EAP HearingPharmacy Management Chiropractic

Complementary CareCase Management Integrative MedicineAbsence Management Physical TherapyDisability Management


Reward Behaviors

Reinforce theCulture of Health

•Reward champions

•Set incentives for healthy choices

•Reinforce at every touch point

Fourth Fundamental Pillar


Positive Re-Enforcement

Culture reminders (Managers, Leaders,…)Cash, debit cards ($25 to $200)Benefit Design (HSA contributions)Hats and T-ShirtsPopulation programsSurprise eventsDecorate stairwellsSpecial cafeteria/vending offeringsOrganizational rewards (Departments…)


Quality Assurance

Allow Outcomes to Drive the Strategy

•Integrate all resources

•Measure outcomes

•Make it sustainable

Fifth Fundamental Pillar


Measurement Scorecard

Percent Engagement: 85% to 95%HRA + Screening/counseling + Coaching + Two other sessions

Percent Low-Risk: 75% to 85%Percent of Total Eligible

Proof of ConceptChange in Risk Levels beats the Natural Flow

Change in Cost Levels beats the Natural Flow

Year over Year Trends Approach Zero Percent

Improved/no change Separate from Not Improved


Four Levels of Company Engagement

1. Do-Nothing

2. Level One (focus on high risk)

3. Level Two (Comprehensive)

4. Champion Company (add Culture)


3

2

1

0

1 2 3 4 5

Five Pillars of Health Management1-Senior Leadership 2-Operations Leadership, 3-Self-Leadership, 4-Rewards for Positive Actions, 5-Quality Assurance

Engagement Levels of the Health Management Program3-Champion 2-Comprehensive 1-Traditional 0-Do Nothing

Program Rating: Engagement per Pillar


Summary


Lifestyle Scale for Individuals and Populations: Self-Leaders

ChronicSigns &

SymptomsFeeling

OK

PrematureSickness, Death & Disability

High-Level Wellness, Energy and Vitality

Edington. Corporate Fitness and Recreation. 2:44, 1983


The Challenge

Expand the Health Status Strategy

from a singular focus on Sickness and Precursors to Disease

to include a focus on Wellness and Precursors to Health


Sound Bites

3. “Total Population Management” is the effective healthcare strategy and to capture the “Total Value of Health”

2. Refocus the definition of health from “Absence of Disease to High Level Vitality.”

4. The business case for Health Management indicates that the critical strategy is to “Keep the Healthy People Healthy”(“keep the low-risk people low-risk”).

5. The first step is, “Don’t Get Worse” and then “Let’s Create Winners, One Step at a Time.”

1. The “Do Nothing” strategy is unsustainable.


What’s the Point?


Thank you for your attention.Please contact us if you have any questions.

Phone: (734) 763 – 2462Fax: (734) 763 – 2206

Email: [email protected]

Website: www.hmrc.umich.edu Dee W. Edington, Ph.D. , Director Health Management Research Center University of Michigan 1015 E. Huron St. Ann Arbor MI 48104-1689

the world we have made as a result of the

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